Question

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

	Fixed Cost per Month			Cost per Car Washed
Cleaning supplies				$	0.80
Electricity	$	1,200		$	0.15
Maintenance				$	0.20
Wages and salaries	$	5,000		$	0.30
Depreciation	$	6,000
Rent	$	8,000
Administrative expenses	$	4,000		$	0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.

Required:

Complete the company’s planning budget for August.

Lavage Rapide
Planning Budget
For the Month Ended August 31
Revenue	$43,080 selected answer incorrect
Expenses:
Cleaning supplies	7,560 selected answer incorrect
Electricity	2,670 selected answer incorrect
Maintenance	2,260 selected answer incorrect
Wages and salaries	8,500 selected answer incorrect
Depreciation	6,000 selected answer correct
Rent	8,000 selected answer correct
Administrative expenses	4,950 selected answer incorrect
Total expense	39,940
Net operating income	$3,140

Can you show me where I went wrong and provide me with the correct steps to answer this question. Thank you.

Answer 1

	Planned budget = fixed cost per month +9,000*cost per cash washed
		fixed cost	cost per			9,000
		per monht	car washed			planned
Revenue	4.9					44100
Expenses
Cleaning supplies			0.8			7200
Electricity		1,200	0.15			2550
Maintenance			0.2			1800
Wages and salaries		5,000	0.3			7700
Depreciation		6,000				6,000
Rent		8,000				8,000
Administrative expenses		4,000	0.1			4,900
total expense		24200	1.55			38150
net operating income						5950